The Complete Guide for Finding a Payroll Solution in 2020
Finding the Right Small Business Payroll Service for YOU
Let’s face it, payroll can be a real pain. For small business owners with limited time already, manually recording payroll, filing payroll taxes, and doing everything else required with employee wages can be overwhelming.
If you only have limited experience with and knowledge of payroll requirements, you may even incur payroll tax penalties when you fail to follow compliance regulations. Then you have to know how to resolve mistakes, all while running your company and trying to keep everything afloat.
Any of this sound familiar? You’re not alone. Thousands of small business owners struggle to find a payroll system that’s the perfect fit. But without such a system, they may end up spending more time and money trying to fix payroll penalties that could have been avoided with a reliable payroll solution.
What’s the Solution?
So, what’s to be done? That will depend on your particular business and how much time and money you want to invest in payroll. However, in this complete guide we’ll address frequently asked questions small business owners have to help you find a solution that’s best for you and your company.
The fact of the matter is that your business needs you, but it also needs a dependable payroll system to meet compliance guidelines. Keep reading to find out how to choose a payroll provider or software that will solve the pain points you encounter as a small business owner.
In this guide you’ll find answers to the following questions about payroll for small business:
- What Kind of Payroll System Do You Need?
- We’ll start with the basics, why most small businesses require some sort of payroll system and what you need to know about selecting the right system for your company.
- What Are My Options for Payroll Processing and Management?
- If you’re feeling overwhelmed with payroll, you have a few options at your disposal. Read pros and cons for doing payroll on your own, hiring an in-house payroll specialist, or outsourcing payroll completely.
- Why Outsource Payroll Processing in the First Place?
- For many business owners, payroll outsourcing is the solution they’ve been looking for. Unlike some of your other options, it comes with added benefits specific for what small business owners face.
- What Do Payroll Processing Companies Take Care of For You?
- From issuing direct deposits and W-2s to filing profit and loss reports and payroll taxes, learn what a payroll company can take off your to-do list.
- What Payroll Provider Do People Prefer? What Should You Be Looking for in Payroll Service Providers?
- How do you know when you’ve found the best payroll provider? These five attributes are a good place to start your consideration.
- What is the Best Payroll Software for Small Business?
- Learn more about what to look for in a payroll software in order to find the best option for your small to midsize business.
- Why Alliance? Making the Final Decision
- You have a lot of options for small business payroll service providers. But we have what you need with a personal touch and exceptional customer service that you won’t find anywhere else.
What Kind of Payroll System Do You Need?
For starters, do you even need a payroll software? The answer to that question will depend on if you have any people under your employment or if they are self-employed contractors.
If you do have hired employees, you will need some sort of payroll processing solution for tax purposes. Employers are required to deduct a portion of employee’s paychecks for Medicare, Social Security, and unemployment taxes.
Who’s Considered an Employee?
Classifying if your workers are employees or independent contractors can be tricky. According to the IRS, this is dependent on the business’ relationship with the worker as well as the amount of control they have over that worker.
Generally an employee will have a regular working relationship with the business, sometimes receiving benefits and a written contract of employment.
Keep in mind, though, that for some types of business entities even the business owner is considered a paid employee (looking at you, S-corporations). This means that you will still require to process payroll even if you are the company’s sole employee.
Talk with a tax advisor or certified payroll professional if you are unsure about which workers within your company are employees vs. independent contractors. The bottom line here is that if you have any employees, it’s time to get a reliable payroll system.
Unfortunately, that’s easier said than done. As discussed earlier, choosing a payroll solution is no easy solution, especially for small business owners with enough on their plate as it is.
Continue using this guide to help you navigate your options and decide on what you want and what will work best for your company’s specific needs.
What Are My Options for Payroll Processing and Management?
When you’ve determined that, yes, you do need a payroll system, the next step is to look at all your options.
- Do Payroll Yourself
- Many business owners just starting out (and even beyond) take payroll responsibilities on themselves. They give checks to employees, record numbers in an Excel spreadsheet, set notifications for when tax deadlines are coming up, etc.
- If you’re one for having full control over your company and its finances, then maybe doing payroll yourself isn’t a bad route. What business owners often find, though, is that this manual option can be very, very time-consuming.
- Most business owners who go the DIY route end up enlisting the help of a payroll software like Intuit Quickbooks for more accurate reporting. You just enter the information required and the software generates checks, direct deposits, and reports in time for tax season.
- This sort of online payroll service can help you save time without costing you too much. However, it will still require you to stay on top of deadlines and inputting information correctly.
- Hire an In-house Payroll Specialist
- If payroll isn’t your cup of tea, you may want to hire another employee with specific payroll responsibilities. They are the ones in charge of handling all things payroll while you take on other management tasks within your company.
- They may use an online payroll service or another payroll software, but this option is especially effective when the payroll specialist has a background in payroll tax accounting, bookkeeping, and/or HR and payroll.
- The problem here is that payroll accountants don’t always have the certification or experience to handle other necessary human resource services. For example, on top of a payroll software, you’ll also need a time and attendance tracking system that connects with employee salaries. Companies can also benefit from an integrated onboarding system that connects new employees into the payroll software automatically for a seamless hiring process. You’ll also need to factor in workers’ compensation, employee benefits and retirement plans, etc.
- One in-house payroll specialist may not be fully equipped to handle all these extra facets, so you may end up paying more for other hired specialists to manage each separate category.
- Outsource Payroll Management
- Trying to communicate and coordinate with those separate departments can be a nightmare for some business owners. Which brings us to your third option: payroll outsourcing.
- Completely contract out all payroll responsibilities (including other associated HR responsibilities) to a payroll processing company. Such providers have certified payroll professionals dedicated to understanding payroll tax changes, simplifying payroll processing, and providing support for your payroll software.
- For startups or any business that doesn’t want to deal with the hassle of payroll day in and day out, such payroll companies for small businesses handle all concerns in a professional and timely manner, generally with fewer errors.
Why Outsource Payroll Processing in the First Place?
Overwhelmed yet? Payroll can be exhausting for any business owner. But that’s why payroll outsourcing is often the solution that many entrepreneurs and small business owners need.
What makes payroll outsourcing a smart solution for your small business?
- It’s a HUGE Timesaver
- How long does it take you to process payroll? If you’re spending more than a couple of hours every month, you need a more time-efficient system. Save time by outsourcing payroll to clear up your monthly agenda and to-do list!
- As a business owner, how you maximize your time can have a dramatic effect on the success of your company. Spending countless hours on payroll and other administrative tasks is not where your energy should be spent.
- A payroll processing company can help lighten your load, especially when they offer an automatic payroll software to streamline procedures such as onboarding a new hire.
- Avoid Tax Penalties for Easier Compliance
- We’re all human, we make mistakes. But when it comes to payroll, too many mistakes can be costly.
- If you’re unfamiliar with payroll compliance for local, state, and federal taxes, it can be all too easy to make errors and incur tax penalties. Your small business can’t afford such errors, especially if you’re still in startup mode.
- Payroll companies for small businesses know how to keep your company compliant and will file payroll taxes correctly and on time. If you’re feeling like a deer in the headlights when you receive notice about a tax penalty, an outsourced payroll specialist can answer all your questions and walk you through the process to resolve any issues. They’re the experts you want to accomplish those time-consuming payroll tasks.
- You Get to Focus on What You Do Best
- Chances are that you started your small business because of your passion for a particular industry or product. We’re guessing that you didn’t become an entrepreneur for the payroll side of the business.
- With help from an outsourced payroll company, you get to keep your focus on expanding your small business and building revenue. The nitty-gritty and behind-the-scenes payroll processing if left to certified specialists who are experts at what they do.
Is it Worth it to Outsource Payroll if You Only Have a Few Employees?
Some business owners with few employees wonder if the cost to outsource payroll is even worth it. But look at the time you’re spending on payroll compliance every pay period. Look at where your efforts would be of better benefit to your company. Look at the costs of that wasted time and incurred penalties.
When you look at the full picture, it becomes clear that payroll outsourcing is worth it. By saving time, avoiding payroll mistakes, and streamlining your processes, you end up saving your company more money and keep the employees you do have happy.
That being said, some payroll companies will be more expensive than others. For a less expensive solution, finding a smaller, local payroll processing company may help lower costs.
What Do Payroll Processing Companies Takes Care of for You?
- Issue Direct Deposits and Pay Stubs
- Set up an easy-to-use system for yourself and your employees. Payroll processing companies with convenient software allow employees to check their pay stubs anytime, even from their mobile phone. Such software can also connect to patient portals for seamless direct deposit distribution every pay period.
- Administer Employee Benefits
- Let your outsourced payroll providers take out needed amounts directly from the employee’s paycheck every pay period for their specific employee benefits. Calculating this every month for every employee can put a huge strain on small business owners. But when you outsource the task, it’s one less thing for you to worry about.
- Unemployment Claims and Wage Garnishment Management
- When employers receive a notice about garnishing an employee’s wages, many feel like deer in the headlights. These notices and unemployment claims need to be handled in a way that appeases the court, which can make them feel all the more frightening. But with an experienced payroll manager at your side, they can easily navigate through such claims and garnishment notices for you.
- Distribute W-2s, I-9s, and 1099s
- For employees paid by the hour and with a yearly salary, a payroll processing company will make sure your employees have all necessary documentation, signatures, and correct information for important tax documents.
- Generate Profit and Loss Reports
- Any small business would do well to have a system that creates accurate income statements whenever you need it. Keeping close tabs on profits and losses can help you move your business in the right direction. However, that first begins with the reports and analytics a payroll company can provide you with.
- Automatically File and Deduct Taxes
- The automation that payroll service providers offer is invaluable, especially when it comes to filing local, state, and federal taxes. Correctly deduct employee wages and send in your filed taxes before each deadline without skipping a beat.
- Keep Your Business Payroll Compliant
- Along the same line of thought, a professional payroll processors help you to avoid tax penalties. Such penalties can be costly for small businesses trying to grow as a company. Maintain payroll compliance easily with help from certified payroll specialists who offer these and other payroll management services.
What Payroll Provider Do People Prefer? What Should You Be Looking for in Payroll Service Providers?
All the payroll services sound amazing to free up your time and keep your business moving forward. But now, how do you choose a payroll service provider? Every business will prefer different payroll providers for various reasons. Nevertheless, you’ll find a few key features to look for when choosing a payroll company for your small business.
For example, not every payroll service provider will offer the same level of reliable customer support. Many payroll companies are big-wig corporations with an 800 number to call. But your small business deserves more personalized attention.
Local payroll management companies like Alliance Resource Services provide each client with a payroll representative that understands their particular business. When you call in for help, you aren’t directed to a general customer service agent, but a certified payroll specialist who is already familiar with your company. That’s the kind of service you want.
Another must is an automated payroll software. It’s time for your payroll to go paperless with an efficient system that takes care of all employee wages, direct deposits, tax forms, financial reporting, tax compliance, and more with just the click of a button.
If the payroll processing system you’re considering requires you to keep inputting information manually, you can do better. The top payroll companies will offer full automation for everything from initial onboarding to sending out an employee’s last pay stub.
Under this automation also falls the need for an easy-to-use payroll system. The software you are provided with should be simple to navigate for both employers and employees. Look for simple, yet comprehensive payroll software and payroll providers that offer training for how to use the system so that you aren’t left in the dark.
Certified Payroll Specialists
Having experts at the helm is a good idea for any business operation, particularly with payroll. Every year, new tax changes are enforced, making the need for certified payroll processors even more important.
Search for payroll outsourcing companies that gets your company the experience and expertise it needs to avoid payroll penalties. If your payroll manager isn’t one with sufficient experience and a thorough understanding of how to process payroll correctly for your business, that provider is not the right fit.
You may think that hiring that in-house payroll specialist is the solution to this, and it can be. But who’s to say that the accountant you hire has experience with a business like yours? How long will it take for them to adapt?
Outsourced payroll managers, though, have worked with several different businesses in various industries. They understand your business because they’ve helped others just like it. So you can feel confident that your payroll is in the best hands, while you go run your business.
What most hired payroll accountants also can’t offer you is an all-in-one human resource management system. After all, payroll comes down to more than just processing employee wages. Benefits also need to be taken into account, time and attendance tracking will factor in, new hire onboarding should be seamlessly connected to your payroll system, and so on.
A payroll provider that doesn’t provide you with an integrated system for your multiple HR administrative tasks can decrease your company’s productivity by increasing time spent on these necessary tasks.
Instead, look for a payroll provider with that all-in-one software that eliminates the need for multiple systems. This will be convenient for your own reporting purposes as an employer, but also will be a lifesaver for employees who want to view their pay stubs, request vacation days, and sign up for benefits all in the same place.
One of the most common questions we hear from business owners looking for a payroll processing company is, “How much does it cost?”
In the long run, payroll outsourcing is often more cost-effective for small businesses compared to hiring an on-staff accountant. You’ll not only have to pay them a salary, but you’ll also have to pay for other staff to manage the rest of your company’s HR responsibilities.
But with an outsourced HR and payroll company, you’ll save more money without needing to hire so many different department heads. When you go with a local payroll provider like Alliance Resource Services, you save even more than you would with the big-name payroll companies that offer the 800 number service and charge you for more than you need. Alliance lets you pick and choose just the services that your company requires to provide the ultimate service at a more competitive cost.
What is the Best Payroll Software for Small Businesses?
What we’ve found in our years of payroll processing experience, is that some payroll systems are simply better than others. But how can you decide which is the best payroll software for your small business?
In the end, it will come down to the needs of your business and the conveniences that a modern payroll software should provide. Our team at Alliance Resource Services uses an integrated payroll software from PrismHR for a number of reasons, but particularly for a few key features that make for an exceptional and reliable system all around the board.
- Simple Integration
- As mentioned before, integration with other human resources systems has become more than just convenient for small business owners. Many employees now expect an electronic onboarding process, simple benefits management systems, and easy-to-access time and attendance tracking. The best payroll software won’t just be for payroll, but for a myriad of other HR services.
- Customized for You
- That being said, you won’t need every feature that a larger corporation will need in their payroll processing system. Search for a software that will grow with you and can be customized as you need. That way you won’t be paying more for unnecessary services.
- Automated, Automated, Automated!
- We can’t stress this enough. One of the main purposes behind a payroll software should be to save you time. While outsourcing payroll processing can help you there, so can an automated system that generates the reports and files you need without human error and on the fly.
- Great for Employers and Employees
- It won’t just be a payroll manager that benefits from a great payroll system. Business owners and employees want a secure system that’s easy to navigate and find what they need. A system that gives them real-time access (even from their phones!) to the information they need. The kind of software that gives them the flexibility to view or print out reports and tax documents whenever and wherever. Give your employees (and yourself) a payroll system that offers you more than just the basics and at a great rate.
Why Alliance? Making the Final Decision
With so much information and time-consuming details that go into payroll for small business, pick a solution that will offer you some relief. To the business owners that want to avoid making payroll tax mistakes but don’t know how, to the ones who want a better system than inputting numbers into an Excel spreadsheet, to the dedicated entrepreneurs who want to get back to growing their business but don’t have the time or resources on top of payroll processing—we offer the solution you’ve been needing.
Why to Choose Alliance as Your Small Business Payroll Service Providers
Alliance Resource Services solves all the pain points small business owners face with payroll. We understand how hard it is to keep your company payroll compliant when payroll taxes change all the time. We are a payroll processing company you can outsource to manage payroll, provide you with a small business payroll app and software, file taxes on time, and more.
Streamline payroll and other HR services all from one outsourced company with years of experience and personalized service. We offer the personal touch you won’t get from big HR and payroll processing companies. Instead, we communicate with you one-on-one to find customized solutions that will save you the most time and the most money.
You have so many options that claim to be the best payroll service for small business. But let our local team show you how easy small business payroll can be. Let us take the weight off your shoulders so that your company can thrive.
For any additional questions you may have about payroll for small business, contact our certified payroll specialists today.